10:59 am

Tue February 12, 2013

Tucson Wants Mexico's Business

TUCSON, Ariz. — Border cities are increasingly eager to boost trade, commerce and contact. San Diego’s new mayor is opening up the first city office in Tijuana and now Tucson, 60 miles north of the line, is opening its own trade liaison office, working with businesses in Nogales and Hermosillo. Tucson city officials are pushing for a bigger piece of the booming trade pie and for more wealthy shoppers.

At Sun Lighting in central Tucson, Danny Levkowitz is selling a $25,000 light fixture to a client. He and his wife have owned this high-end store for more than two decades. About one-fifth of his business comes from Mexico. Levkowitz knows he faces little competition in Sinaloa and Sonora for these shoppers. In fact, to shop for products like these in Mexico would require a trip across the country to Monterrey in Nuevo León.

"And their freight costs from Monterrey to Sonora is also more expensive than to come to Tucson from Sonora," Levkowitz said.

A 2008 economic impact study (PDF) found that Pima County, where Tucson sits, draws in more Mexican shoppers than any other Arizona region. Those shoppers make up 5 percent of the county’s sales tax and spend about $2 billion a year here. But Tucson wants more of that business, and its officials are frustrated at the lack of growth. They’re not feeling the love.

"The relationship between cities in Sonora and Arizona, it’s a soap opera from Televisa. Tucson wants to do business with Hermosillo and be their place of choice. But Hermosillo doesn’t want anything with Tucson, they want to work with Phoenix. But Phoenix doesn’t want Hermosillo. They want Europe. So it seems like a soap opera. Everyone’s in love with someone else that doesn’t love them back.”

What Tucson needs is to become a more attractive suitor for those Mexican cities. So earlier this month, the city hired a cousin to the governor of Sonora to be a trade liaison, Juan Francisco Padrés.

Even more important than more shoppers coming north, Padrés and the city want the goods coming up from Sonoran maquila plants.

“We’re talking Fortune 500 companies in Nogales, in Guaymas, that could use Tucson as a distribution site. That could use Tucson for warehousing," Padrés said.

Currently, the bulk of those $260 billion worth of goods imported every year from Mexico bypass Tucson. They either come through Texas border cities, which absorb 70 percent of the border’s imports, or they rumble straight through Tucson on trains and semi-trucks and have no reason to stop here.

"We’re in a logistical hotspot. I mean anything coming from Mexico, instead of going through Texas, why not Arizona? Why not Tucson?" Padrés said.

This is all a resurrection of trade plans that were brewing before the economy crashed and before Arizona’s controversial SB 1070 immigration law was passed. At that time, expansion dreams were put on hold. But now they’re coming back. Last winter, Arizona hired a Sonoran businessman as its Mexico Commission liaison, a position that had been closed since 2008 for budget reasons.

Both Garcia and Padrés admit it’s an ambitious project. If the city is going to be successful turning itself into a go-to hub for northern Mexico, critics say Tucson’s going to have to build its infrastructure to give those desired freight cars a place to stop in the city.